Go to contents

Korea's tech giants LG, Samsung release Q1 operating profit

Korea's tech giants LG, Samsung release Q1 operating profit

Posted April. 29, 2016 08:11,   

Updated April. 29, 2016 08:46

한국어

Samsung Electronics is showing signs of revival as the IT Mobile sector posted almost 4 trillion won (3.51 billion U.S. dollars) in operating profit in the first quarter of 2016, getting close to the mark of 3 trillion won (2.63 billion dollars) for the first in seven quarters. The results are attributable to the synergy of the Galaxy S7 (premium model) and Galaxy A and J (mid-and low priced models) working in tandem.

On Thursday, Samsung Electronics announced confirmed business performance in the first quarter of 49.78 trillion won (43.7 billion dollars) in sales and 6.68 trillion won (5.86 billion dollars) in operating profit. The sales and the operating profit rose by 5.6 percent (2.33 billion dollars) and 11.7 percent (614 million dollars), year-on-year respectively, with the operating profit to sales ratio at 13.4 percent.

As Apple made an official announcement of the first negative growth in 13 years on Wednesday, a keen attention was paid to the IT mobile department. Having surpassed the mark of 3 trillion won in operating profit in the second quarter of 2014, Samsung’s IT Mobile department posted 3.89 trillion won (2.63 billion dollars) in operating profit, significantly exceeding market projections. The figure is up 74 percent against the previous quarter and 42 percent year-on-year.

“This time, we’ve launched our new product, the Galaxy S7, a month earlier compared to last year, and the sales have clearly increased in major markets including North America and Europe. As for the Edge in particular, the inventory is managed very well as the product is selling instantly after being stocked,” said an official from Samsung Electronics.

The South Korean mobile giant began to streamline the line-up of budget models into the Galaxy A and Galaxy J, which significantly boosted business efficiency. “The sales of the Galaxy A and J are gradually increasing in China and in emerging markets, respectively,” explained an official from Samsung Electronics. The mobile maker sold a total of 92 million cell phones in the first quarter alone, and 80 percent to 85 percent of them were smartphones.

The semi-conductor sector fared as well, posting 2.63 trillion won (2.31 billion dollars) in operating profit in the face of the DRAM doldrums. The household appliances were also turned into profit-making at 510 billion won (447 million dollars) from minus 140 billion won (122 million dollars) from the same period of last year.

In the meantime, LG Electronics also made a public announcement on Thursday that it posted 13.36 trillion won (11.7 billion dollars) in sales and 505.2 billion won (443 million dollars) in operating profit in the first quarter. The profit in household appliances including TVs have increased by 65.5 percent (267 million dollars) year-on-year and 44.8 percent (306 million dollars) quarter-on-quarter.

LG's mobile communications division, which is in charge of smartphone business, however, posted 202.2 billion won (177 million dollars) in operating loss, staying in the red quarter-on-quarter (53.4 million dollars).

“We are expecting that performance will improve in the second quarter as the sales of our flagship phone G5 will be reflected,” explained an official of LG Electronics. "The upbeat sales in premium products including household appliances and TVs led the overall improvement of operating profits."



김지현기자 jhk85@donga.com · 서동일기자 dong@donga.com